Choosing Medicare Advantage plans: HMO or PPO?

Choosing between a Medicare Advantage HMO (health maintenance organization) plan and PPO (preferred provider organization) plan can feel confusing at first. There are many differences and features to compare. But the good news is both options are designed to give you quality Medicare Advantage coverage.

For many people, an HMO plan offers a simpler, more coordinated approach to care; lower costs and fewer surprises. However, a PPO plan provides flexibility at a higher cost. Understanding how each works can help you choose what best fits your needs.

Comparing Medicare Advantage HMOs and PPOs

Both Medicare Advantage HMOs and PPOs offer many of the same services, but differ in how you access care and what you pay each month. HMOs typically focus on coordinated, in-network care, often with lower monthly premiums and more predictable costs. Alternatively, PPO plans allow you to see in- or out-of-network providers, but usually have higher monthly costs.

Medicare Advantage HMO: coordinated care with predictable costs

• Lower monthly premiums than PPO plans
• Localized network of doctors and providers
• Ability to see specialists without referrals (coverage may vary by plan selection)
• Coordinated in-network care
• Medical, prescription drug, dental, vision, and hearing benefits (coverage may vary by plan selection)
• Low emergency or urgent-care costs

Medicare Advantage PPO: flexible care with higher costs

• More flexibility in seeing both in- and out-of-network providers
• Predictable costs for using in-network providers, but higher costs for out-of-network providers
• See most specialists without a referral (in or out of network)
• Low emergency or urgent-care costs

Modern HMOs are a cost-effective option

Historically, HMOs have been seen as restrictive, but that’s not the case today. Highmark offers HMO plans with a strong network of healthcare providers, as well as the option to see an in-network specialist without a referral.

Combined with strong coordinated care, this makes modern HMOs a smart, cost-effective option for many Medicare Advantage members. That’s why for most of your everyday care needs, an HMO plan is an affordable option. For many people, it’s this combination of simplicity, savings, and coordinated care that makes an HMO plan an easy and practical choice.

Who’s an ideal fit for an HMO plan?

• Values monthly cost predictability
• Has an established primary care physician (PCP)
• Lives in the area they receive care
• Seeks low monthly premiums, $0 copays and limited out-of-pocket expenses
• Wants comprehensive benefits — including medical, prescription drug, dental, vision and hearing — without complex networks
• Desires coordinated care with providers who work together

PPOs offer additional flexibility but cost more

With PPO plans, you generally get more flexibility, but at the cost of higher monthly premiums. That flexibility comes in several forms, such as the ability to use doctors, whether they are in or out of network. For example, if you spend the winter in Florida, a PPO plan can provide coverage while you're away from home. Again, PPOs are a bit more flexible, but that convenience comes with additional costs.